Retailers misinterpret the ‘Showrooming’ Effect at their own peril

The holiday shopping period of the year is just about to start, and plans for overcoming ‘showrooming’ effect, which last season wreaked havoc on brick and mortar retail sales expectations, are abounding. As retail executives and consultants decide to focus on pricing and smartphones (i.e., price transparency) as root causes of their problems, their plans to combat it will likely fail.

“…the pressure created by showrooming is evident in a number of moves that bricks and mortar retailers have made recently. In January, Target sent a letter to vendors asking for their help in combating the problem, suggesting that they create exclusive products for the Minnesota-based retail chain or find ways to match the low prices offered by online retailers. And Best Buy has replaced the standard barcodes on some products with different, chain-specific barcodes that make it impossible for consumers to scan those codes and find a quick online price comparison.”

In fact, these plans will possibly backfire because the most critical factor of brick and mortar retailers is the poor customer experience they provide, and they seem to largely ignore it. In the aftermath of Best Buy revenue disappointment last winter, we decided to look at their problem from their customers’ perspective. The most important attribute of Customer Experience for Best Buy customers is “customer service” with 42%, and not the “price” which is at 4%.

And yet, the Best Buy “customer service” has disappointed their customers with 33% below their expectations. Specifically, customers come to brick and mortar store, expecting qualified help in choosing the right product for their needs. It seems a win-win proposition for retailers as better selected products means fewer returns that translate into better margins. However, the challenge they face is how to enable sales floor personnel to deliver the service that the customers expect.

I don’t have enough knowledge to delve into their product training and compensation policies, but I do have a novel idea to rely on customers experience with the products in a store inventory, to provide the advice shoppers want. Instead of blocking their smatphone signals and confusing them with private label products, give them what the information and assistance they came for, enabled by technology. There are examples of technology that can be leveraged to assist sales floor personnel in providing much better customer experience, and one of them is featured here. This is a category-based advisory service that can be deployed on any web device at the store. It can easily be adopted for any consumer product category and configured to the store’s inventory at very low cost.